Select committee inquiry
Penalty charge notices in healthcare inquiry
Closed
What the inquiry looked at
“Some people are exempt from paying for prescriptions and/or dental treatments if they have a valid reason which can include: age, medical conditions, maternity, or because they receive certain benefits or have a low income. Those who claim a free prescription or dental treatment without a valid reason – whether fraudulently or in error – could be issued with a penalty charge notice (PCN). The NHS estimates that it lost around £212m in 2017-18 from people incorrectly claiming exemption from prescription and dental charges. However, the value of PCNs has risen significantly: the value of prescription PCNs, for example, has risen from £12bn to £126bn between 2014-15 and 2018-19. Overall, since 2014 PCNs have generated £133m for the NHS. A recent National Audit Office (NAO) report found that the rules around entitlement to free prescriptions and dental treatments are complicated, and that this is leading to genuine mistakes and confusion for many people. Eligibility is a significant cause of this confusion: people’s eligibility can change rapidly and there are differences between the eligibility rules for prescriptions and dental treatments. While the number of eligibility checks has increased significantly (prescription checks for example have risen from 750,000 in 2014-15 to 24 million in 2018-19), communication to help people understand PCNs only started in September 2018. On 1 July at 4.00pm, the Public Accounts Committee will question the NHS and Department of Health and Social Care about the effectiveness of current PCN arrangements. It will challenge the Department on the complexity of the eligibility rules for PCNs and the impact on vulnerable people. It will also use the session to question the NHS Business Services Authority, who are responsible for issuing the PCNs, on the steps it is taking to improve the system.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
In the committee's words, from the summary of 115th Report - Penalty charge notices in healthcare ↗
Penalty charge notices (PCNs) are supposed to discourage people from claiming free prescriptions or dental treatment when they are not entitled to do so. But the current PCN process is a heavy-handed rush to judgement which penalises those who fail to navigate the overly-complex exemption criteria and neglects clear evidence of abuse by repeat offenders. It is not fit for purpose.
The Department and NHS England have been shockingly complacent about the fundamental problems with the PCN process, justifying their approach because most exemptions are claimed correctly and the system generates additional revenue for the NHS. But they seem to have lost sight of the fundamental importance of helping people claim what they are entitled to. The NHS Business Services Authority (NHSBSA) has not attempted to identify those who are entitled to an exemption but pay for treatment and the Department recognises that some people may not seek treatment because they are worried about getting a PCN. They are only now beginning to trial basic improvements.
However, we remain highly sceptical about the speed with which these can be rolled out, particularly where they depend on new IT systems.
We fully support efforts to deter fraud and the pursuit of those who deliberately claim exemptions to which they are not entitled. However, we simply do not believe that the current system achieves this efficiently. The Department and NHS England need a fundamental reappraisal of how they can more effectively and humanely pursue these goals.
What the government said
No government response is linked to this report.
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 19 June 2019 to 24 January 2020.
- Oral evidence 1 Jul 2019
- Report 20 Sep 2019
- Correspondence 2 letters
What it recommended 2 recommendations · 25 conclusions
1Patients are finding it extremely difficult to understand whether or not they are entitled to...
Recommended (the committee's words)
Patients are finding it extremely difficult to understand whether or not they are entitled to free prescriptions or dental treatment. Rules about entitlement to free prescriptions and dental treatment are unnecessarily convoluted, as illustrated by the Department’s 24-page handbook to explain the single page prescription form. Exemptions from prescription and dental charges include age, maternity, receipt of certain means-tested benefits, low income, and long-term medical conditions in some cases, although we are told that this list of long-term conditions has not been updated for 50 years save the addition of cancer in 2009. A person’s eligibility for exemption also varies between prescriptions and dental treatment. An already complex system has been further complicated by the roll-out of Universal Credit, which means entitlement can vary from month to month. There is currently no way of indicating receipt of Universal Credit on prescription forms, resulting in more confusion, and the Department for Work and Pensions (DWP) does not confirm eligibility when they write to claimants about their confirmed benefit entitlements. The Department of Health and Social Care acknowledges that it is a very complicated system and that some of the current processes can cause people distress. Only after ramping up its exemption checks and PCN regime did NHSBSA realise that patients were confused by the rules, implying that it had very little awareness or response before. Recommendation: The Department of Health and Social Care should set out how it will make exemptions more readily intelligible for all claimants, based on evidence of how users complete applications. The Department should work more closely with the Department for Work & Pensions to improve the information provided to benefit claimants about whether they are entitled to free prescriptions. Specifically, it should investigate the feasibility of DWP indicating whether claimants are entitled to free prescriptions or dental treatment in the letters it sends to claimants about eligibility for benefits.
2NHSBSA’s presumption of guilt means penalty charge notices are issued too readily, particularly where vulnerable...
Recommended (the committee's words)
NHSBSA’s presumption of guilt means penalty charge notices are issued too readily, particularly where vulnerable people are concerned. Since 2014, around 1.7 million PCNs (30% of all PCNs issued) have been subsequently withdrawn because a valid exemption was confirmed to be in place following a challenge. Where NHSBSA cannot find supporting evidence for an exemption, it automatically issues a PCN to the patient, rather than giving them an opportunity to correct a mistake, provide evidence or pay the prescription or treatment charge. The Department plans to introduce an additional stage in the PCN process where an individual will be alerted to a possibly unjustified exemption claim before a PCN is issued, and therefore have the opportunity to challenge it before being charged up to a £100 penalty. We welcome this extra step but question why NHS England did not introduce it at the outset, given its success in Scotland and Northern Ireland. NHSBSA acknowledges that some of its processes can cause distress, and before sending out PCNs it filters out addresses which are known to be residential care homes. This is likely to cover only a small proportion of vulnerable people whom it should not be pursuing with fines. 6 Penalty charge notices in healthcare Recommendation: In six months’ time, the Department should write to the Committee to establish when it plans to introduce the additional checking stage in the PCN process and the timeline for doing so. In the same letter, the Department should set out how this will reduce the proportion of PCNs that are later overturned and identify claimants who may be particularly vulnerable.
3NHSBSA has implemented the PCN policy without evaluating the impact of PCNs on claimants seeking...
Concluded (the committee's words)
NHSBSA has implemented the PCN policy without evaluating the impact of PCNs on claimants seeking treatment. NHSBSA continues to stress that 97% of non-age-related exemption claims are correct, using this to justify the PCN process. However, it has not attempted to identify those who are entitled to an exemption but pay for treatment. The Department also recognises that some people may not seek treatment because they are worried about getting a PCN. NHSBSA’s advertising campaigns focus on the consequences of incorrectly claiming an exemption rather than making those who are entitled to an exemption aware that they do not need to pay. We believe that this kind of threatening approach is unhelpful and we are concerned that it could have a negative impact on people who are legitimately entitled to exemption. The British Dental Association tells us that last year it saw a 23% fall in the number of people on low incomes seeking treatment and is concerned that the threat of fines may have discouraged people from going to the dentist. Failure to seek treatment when needed is only likely to push up longer-term costs to the NHS. Recommendation: The Department should actively seek information from the NHS and from other government departments about the consequences of prescription charges and the PCN process. It should provide to the Committee a breakdown of: people not seeking the treatment they need for fear of incurring fines, patients not claiming the exemption to which they are entitled and admissions to hospital as a result.
4We are highly sceptical that real-time exemption checks will be rolled out soon.
Concluded (the committee's words)
We are highly sceptical that real-time exemption checks will be rolled out soon. The Department admits that the system is complex and needs improving, and plans to introduce a real-time exemption check in pharmacies, which would enable pharmacists and patients to quickly check whether they are entitled. While real- time checking might resolve many of the problems people currently face, we are concerned that the Department does not have a start date and, therefore, that such a system is still a long way off. The exemption checks it is now trialling are limited to just four pharmacies who share the same IT system and do not include benefit- related exemptions nor eligibility for free dental treatment. Extending the trials to the ten other IT systems run by pharmacists and incorporating a real-time link to data from the Department for Work & Pensions are likely to present major hurdles. Ultimately, we have no confidence that this system will be rolled out later this year, as the Department told us. Recommendation: NHS England and NHSBSA should pursue real-time checking as a priority, and should write to us with the results of the pilots, confirming a timetable for implementation and the cost of the real-time checking project.
5Where there is clear evidence that people are persistently committing fraud by making false claims,...
Concluded (the committee's words)
Where there is clear evidence that people are persistently committing fraud by making false claims, NHSBSA has failed to take effective action. The Department Penalty charge notices in healthcare 7 claims that the best outcome from the PCN system is the prevention of fraud, but NHSBSA is doing very little to pursue those who repeatedly claim free treatment without an exemption. Nearly 115,000 people have received five or more PCNs for prescriptions, over 1,600 have received 20 or more—yet only five cases have been referred to the Crown Prosecution Service. Only one has been heard in court. The Department has so far failed to approve a prescriptions debt collection process for NHSBSA, leaving it unable to pursue such outstanding debts owed. Yet the system is inconsistent: at the same time, NHSBSA is over-zealous in pursuing people who have made mistakes once. Many people are fined immediately for mistakes that could easily have been corrected, had they been given the opportunity. Recommendation: By December 2019, NHSBSA should evaluate the cost- effectiveness of spending more time and resources pursuing repeat offenders and write to us with the result of this work. In doing so, it should tell us the number of such cases that are being actively pursued.
6The PCN process, as it stands, is not working efficiently or effectively.
Concluded (the committee's words)
The PCN process, as it stands, is not working efficiently or effectively. We therefore call on the Department to substantially overhaul the system, so that those who are rightfully entitled to free prescriptions and dental treatment get the exemption they deserve. Since ramping up exemption checking in 2014, NHSBSA has issued 5.6 million PCNs, but has only collected 20% of their value. The Department argues that its approach is justifiable because it spends 31 pence per £1 collected managing the process. However, it has not calculated costs to the wider health system, where patients—for fear of being fined—do not seek the treatment they need and end up in hospital. Nor does that calculation take account of people paying for prescriptions when they are entitled to an exemption, or paying fines which they could have challenged or which could have been avoided by clearer guidance being available to them in the first place. Last year the PCN process generated a net yield of £25 million for the NHS, a pitiful sum compared to the annual cost of prescriptions which is around £9 billion. We do not dispute that it is right to try and deter fraud and recover costs mistakenly paid by the NHS, but the current system is not fit for purpose. Recommendation: Having acknowledged that the PCN process needs improving, NHS England and NHSBSA should write to us in a year’s time to explain how they have made the process more humane and cost-effective. 8 Penalty charge notices in healthcare 1 Impact of penalty charge notices on patients
7We heard from Parkinson’s UK that the prescription charge exemption list for certain medical conditions...
Concluded (the committee's words)
We heard from Parkinson’s UK that the prescription charge exemption list for certain medical conditions (for England) had not been updated for 50 years, apart from the addition of cancer in 2009. This means many long-term conditions are excluded. Fifty years ago, people suffering from conditions such as sickle cell anaemia and cystic fibrosis were not expected to live very long. Thanks to changes in medical technology since then, patients are living longer, but this is not reflected in the prescription charge exemption list.9 5 C&AG’s Report, paras 1 and 3 (page 7) and para 8 (page 9) 6 NHS Business Services Authority, Are you signing for free prescriptions?: Easy Read, May 2018 7 Qq 6, 118 8 C&AG’s Report, para 1.4 9 Q 32 10 Penalty charge notices in healthcare Figure 1: Exemptions from the cost of prescriptions and dental treatment Penalty charge notices in healthcare 11 10
8Entitlement to free prescriptions and dental treatment also varies between different types of benefits.
Concluded (the committee's words)
Entitlement to free prescriptions and dental treatment also varies between different types of benefits. Benefits fall into two categories, means-tested and non-means- tested. For those who have already undergone a rigorous application process with the Department for Work & Pensions, for example for disability living allowance, it might be easy to mistakenly assume that they are also entitled to free prescriptions or dental treatment.11 Instead, entitlement is based on income-related benefits.12 There have been significant changes to the benefits system in recent years and this means it is confusing for claimants to understand even which benefit they are receiving, let alone whether this then entitles them to free prescriptions or dental treatment.13 For patients who receive Universal Credit, some are eligible for free treatment and others are not. Eligibility can vary from month to month depending on income and self-employed claimants may not know what their income will be.14 Letters from the Department for Work & Pensions confirming eligibility for benefits do not inform claimants whether they are entitled to free prescriptions or dental treatment.15 Although the current Universal Credit online statement advises claimants they “may be able to get help with health costs”.16
9Further confusion is caused by the lack of a Universal Credit option on prescription forms.
Concluded (the committee's words)
Further confusion is caused by the lack of a Universal Credit option on prescription forms. The Department has still not changed its paperwork to accommodate the new benefit, which was first introduced in 2013.17 The Department claims that no one has received a PCN as a result, but it has not attempted to find out whether Universal Credit 10 C&AG’s Report, Figure 2 11 Q 29 12 Q 94 13 Q 2 14 Q 9; C&AG’s Report, para 3.3 15 Q 6 16 Letter from the Department for Health and Social Care, 17 July 2019 17 C&AG’s Report, para 3.3 12 Penalty charge notices in healthcare claimants are simply paying the prescription charge rather than risking being fined.18 We heard examples of Universal Credit claimants who were advised to tick the box for income-based jobseeker’s allowance and were subsequently fined.19
10The Department acknowledged that “it is a very complicated system and that some of [its]...
Concluded (the committee's words)
The Department acknowledged that “it is a very complicated system and that some of [its] current processes can cause people distress” but emphasised that the Government is not considering changes to entitlement.20 NHS England told us it would expect pharmacists to help guide patients in filling out the prescription form and working out whether they are entitled to free prescriptions.21 But we heard from the British Dental Association that it can be extremely challenging and time-consuming for medical professionals to obtain the information necessary to help their patients fill out the form.22
11In 2014 NHS England commissioned NHSBSA to increase its exemption-checking activity significantly.
Concluded (the committee's words)
In 2014 NHS England commissioned NHSBSA to increase its exemption-checking activity significantly. We asked why it had ramped up checks on prescription exemptions without first trying to increase awareness of the entitlement rules. NHSBSA told us that it had identified through its user research that people were confused. It had proposed to NHS England to divert some of the money recovered from PCNs towards making people aware of the process through an advertising campaign. NHSBSA was unable to explain why this was established only after the increase in prescription exemption checks.23 Presumption of guilt
12The complicated rules around entitlement to free prescriptions and dental treatment are difficult to understand...
Concluded (the committee's words)
The complicated rules around entitlement to free prescriptions and dental treatment are difficult to understand even for first-language English speakers with no cognitive impairment. Parkinson’s UK told us how difficult it was for those who face extra barriers due to ill health.24 This complexity is leading to honest mistakes in prescription exemption forms, for which claimants are being immediately fined. We heard several examples of patients who had made minor mistakes and subsequently received PCNs, for example where they had ticked the wrong box because their circumstances were changing, become confused about the differences between prescriptions and dental treatment or where their prepayment certificates had expired during a stay in hospital.25
13NHS England’s current PCN process automatically fines people who incorrectly claim entitlement to free prescriptions...
Concluded (the committee's words)
NHS England’s current PCN process automatically fines people who incorrectly claim entitlement to free prescriptions or dental treatment. In Scotland and Northern Ireland there is an additional stage in the process, where patients first receive a letter informing them that they may have made a mistake and inviting them to prove their exemption or pay the original prescription fee they owe. Only subsequently is a fine issued, where necessary. Interestingly, the initial letter generates much more income than the fines.26 NHS England told us it was also planning to introduce a new stage in its process. This will allow people to correct a mistake before being issued with a PCN. NHSBSA confirmed that this additional stage would be implemented in the coming months but did 18 Q 60 19 Q 201 20 Qq 43, 44, 54 21 Qq 119–123 22 Q 2 23 Qq 58, 59 24 Q 2 25 Qq 14, 50, 54, 56 26 Q 12; British Dental Association (PCN0002), para 27 Penalty charge notices in healthcare 13 not commit to a date.27
14Of the 5.6 million PCNs issued since 2014, 1.7 million (30%) were later cancelled because...
Concluded (the committee's words)
Of the 5.6 million PCNs issued since 2014, 1.7 million (30%) were later cancelled because a valid exemption was found to be in place. We are concerned about the distress caused, particularly to vulnerable people, by receiving a penalty charge notice at all, even more so if it is incorrect. NHSBSA is unable to prevent all vulnerable people from receiving a PCN and instead relies on individuals or their representatives challenging the fine.28 We heard examples of PCNs being issued to refugees where a change of address had rendered their exemption certificates invalid. Many of these people are reliant on agencies to speak up for them.29 The prospect of up to a £100 fine, with a surcharge of up to £50 if unpaid, can be very distressing for those who are already facing difficult circumstances.30
15The Department told us that NHSBSA does a lot of work with vulnerable people both...
Concluded (the committee's words)
The Department told us that NHSBSA does a lot of work with vulnerable people both to try and avoid them receiving a PCN and to assist them in circumstances where they do.31 But we also heard that NHSBSA does not have access to individual health records in order to identify whether a patient may be vulnerable prior to issuing a PCN. The only check that NHSBSA carries out beforehand is finding individuals whose address matches a registered care home. It automatically filters these people out from its checks. NHSBSA’s staff are trained to identify those who may be vulnerable, and they are able to remove the penalty charge in such cases, but this relies on the individual getting in touch with NHSBSA to challenge the fine.32 Wider impact
16The focus of the NHSBSA’s advertising campaign in 2018 was on warning people to check...
Concluded (the committee's words)
The focus of the NHSBSA’s advertising campaign in 2018 was on warning people to check before claiming an exemption or risk a penalty charge. This was the only national advertising campaign undertaken by NHSBSA. Rather than helping inform patients about the entitlement rules, its strapline was “Don’t run the risk”.33 Parkinson’s UK, the British Dental Association and Mencap are concerned about the impact of this threatening approach on patients and on the wider health system. If the risk of being fined excludes people from the treatment they need, patients may end up in hospital or visiting doctors more frequently. This could ultimately cost the NHS more.34 The British Dental Association observed a 23% fall in the number of people on low incomes seeking treatment since 2013–14. It is concerned that those who cannot afford dental charges and are unsure about their exemption status have chosen not to seek dental treatment.35
17The Department acknowledged that there was a risk but told us it had seen no...
Concluded (the committee's words)
The Department acknowledged that there was a risk but told us it had seen no evidence of people choosing not to seek treatment because of PCNs.36 For example, the Department and NHS England were not aware of any work done to calculate the additional costs of 27 Qq 50, 55 28 C&AG’s Report, para 3 (page 7), para 2.10 29 Qq 201, 202 30 Qq 18, 30 31 Q 54 32 Qq 133, 137, 141, 142 33 Q 6; C&AG’s Report, para 3.8, British Dental Association (PCN0002), para 33; NHS Health Costs, “Not sure if you’re entitled to #freedentaltreatment? If you claim incorrectly you could be fined #dontruntherisk”, published 27 June 2019, accessed 6 September 2019 34 Qq 2, 13, 30 35 British Dental Association (PCN0002), para 27 36 Q 61, 69, 70 14 Penalty charge notices in healthcare patients ending up in hospital as a result of not seeking the dental treatment they need.37 NHSBSA told us that it had carried out three equality impact assessments to ensure it is complying with public sector equality duty responsibilities, which resulted in changes to its website for accessibility and PCN process design.38
18NHSBSA emphasised that 97% of non-age-related exemptions are claimed correctly and told us this illustrates...
Concluded (the committee's words)
NHSBSA emphasised that 97% of non-age-related exemptions are claimed correctly and told us this illustrates that patients do understand the rules.39 One of NHSBSA’s performance metrics is the number of checks it must undertake to find an unsubstantiated claim for exemption. In 2014–15 when it started the prescription checking service, NHSBSA issued a PCN for every four checks it undertook. In 2018–19 NHSBSA checked 20 forms for each PCN it issued.40 NHSBSA told us this is evidence that the deterrent effect of PCNs and its advertising campaign are working. The Department admitted that it was unable to tell whether this change is simply due to people not seeking the treatment they need or simply paying the prescription charge for fear of being fined.41 It accepted that it needs to do more to improve the PCN system and make it easier to understand.42 37 Q 198 38 Q 177 39 Q 128 40 C&AG’s Report, para 3.9 41 Q 111 42 Q 70 Penalty charge notices in healthcare 15 2 Effectiveness of the penalty charge notice process Real-time checks
19NHSBSA currently has no direct access to the Department for Work & Pensions’ (DWP’s) data.
Concluded (the committee's words)
NHSBSA currently has no direct access to the Department for Work & Pensions’ (DWP’s) data. In order to match exemptions with details of benefits claimants, it sends three batches of data per week (two for prescriptions and one for dental exemptions) so that DWP can check claims against its database. There is a limit to the number of checks DWP can carry out (300,000 prescriptions and 100,000 dental treatments per week). DWP is currently building an automated process to share real-time data instead. In February 2019, it expected this to take four to six months, plus a further two months for integration. In parallel, NHSBSA is piloting real-time exemption checking in pharmacies, to allow pharmacists to find out immediately whether their patient needs to pay for prescriptions.43
20The Department told us that it plans to include benefit-related exemptions in its real- time...
Concluded (the committee's words)
The Department told us that it plans to include benefit-related exemptions in its real- time exemption checking facility by November 2019 and it hopes to include Universal Credit from early 2020. However, NHSBSA is dependent on DWP to allow it live access to benefit databases.44 Universal Credit creates additional problems for real-time checking because a person’s eligibility can change so frequently. There is a risk that claimants only know retrospectively whether they are eligible for an exemption.45
21The scope of NHSBSA’s current real-time checking pilot is very limited.
Concluded (the committee's words)
The scope of NHSBSA’s current real-time checking pilot is very limited. It is being trialled on a single IT system in four pharmacies and is limited to health-related exemptions. NHS England told us the pilot was going well and NHSBSA promised to write to us with its evaluation, as it expands the pilot to 1,000 pharmacies on the same system later this year.46 Pharmacies use a variety of IT systems and the one trialled in the pilot only has a 10% market share in England. Depending on the outcome of the pilots, NHS Digital plans to work with the other pharmacy-supplier systems to expand real-time exemption checking further.47 But the Department would not commit to a deadline for the full roll-out of real-time exemption checks.48
22The Department has not yet decided whether to extend real-time checking to dentistry.
Concluded (the committee's words)
The Department has not yet decided whether to extend real-time checking to dentistry. It told us that it chose to prioritise prescriptions because of the relative volumes of exemption claims. In the interim, patients still need a way of finding out what they are entitled to.49 NHSBSA is attempting to address this by rolling out an online exemption check tool for patients in England, covering both prescription and dental treatment. NHSBSA told us the tool takes only three minutes to complete but admitted that it does not yet include Universal Credit data and is still in a testing stage.50 43 C&AG’s Report, paras 2.9, 3.7 44 Qq 74, 75 45 Q 86 46 Qq 172, 124 47 Q 128 48 Q 168 49 Q 7, 76, 77 50 Q 79; C&AG’s Report para 3.7 16 Penalty charge notices in healthcare Little action on fraud
23The PCN process aims to recover costs mistakenly paid by NHS England and to prevent...
Concluded (the committee's words)
The PCN process aims to recover costs mistakenly paid by NHS England and to prevent people from intentionally committing fraud by making false claims about their entitlement to free prescriptions and dental care.51 The Department told us that prevention of fraud is the best outcome.52 The NHS Counter Fraud Authority estimated that NHSBSA’s work led to an estimated reduction of £49 million in prescription fraud between 2012–13 and 2016–17. NHSBSA has recently started doing more to pursue repeat offenders who make no attempt to engage. It invites selected repeat offenders to an interview under caution at a police station and then, where appropriate, refers the case to the Crown Prosecution Service (CPS). Between September 2014 and March 2019, 114,725 people received five or more PCNs, including over 1,600 people who received more than 20. Yet so far only five cases have been referred to CPS, and only one heard in court.53 NHSBSA was unable to comment on the individual cases referred to the CPS. It explained that it was up to the CPS to decide how many of the cases should be heard in court.54
24Until recently NHSBSA had no way of pursuing outstanding debts relating to unpaid prescription charges...
Concluded (the committee's words)
Until recently NHSBSA had no way of pursuing outstanding debts relating to unpaid prescription charges and PCNs. NHSBSA began a debt collection process for outstanding PCNs it had issued for dental charges in January 2019. Until then, NHSBSA relied on its contract with Capita. Capita could pursue debts related to dental charges, using its debt collector Akinika. NHSBSA has made a proposal to NHS England and the Department for dealing with repeat offenders, which includes working with a debt collector, but the Department has still not given NHSBSA approval to collect debts for prescription-related PCNs, which limits its efficacy and ability to deter fraud. The Department told us that the proposal was currently being considered and it hoped to make a decision “very shortly.”55 NHSBSA assured us that its proposed debt collection agencies would follow very tight processes and that they would certainly not involve any bailiff activity. It plans to use a debt-collection organisation part-owned by the Cabinet Office which already works with several government departments. We heard that NHS England has neither written off nor capitalised any outstanding PCN debts on its balance sheet; it is therefore not clear how these debts have been accounted for.56
25The Department claims it is trying to be fair both to those who are entitled...
Concluded (the committee's words)
The Department claims it is trying to be fair both to those who are entitled to free prescriptions and dental treatment and to ensure those who are not entitled pay their way. But the readiness with which NHSBSA fines those who make one-off mistakes seems disproportionate in light of its current failure to pursue fraudsters.57 Fraud in prescription exemptions, though individually low-level, still adds up to an estimated £162 million a year.58 The Department acknowledged that it needs to deal with the small pockets of fraud it finds if it wants to see big reductions to the overall fraud figure. But it claimed that the system of wider checks is what deterred fraud, rather than the number of prosecutions.59 51 C&AG’s Report, para 2.12 52 Q 91 53 C&AG’s Report, paras 2.12–14 54 Qq 186, 188 55 Qq 154–156; C&AG’s Report, paras 2.15, 2.16 56 Qq 157, 195 57 Qq 92, 154 58 C&AG’s Report, para 2.11 59 Qq 91, 182 Penalty charge notices in healthcare 17 Inefficient and ineffective process
26We questioned how cost-effective the PCN process was, given only 20% of the value of...
Concluded (the committee's words)
We questioned how cost-effective the PCN process was, given only 20% of the value of PCNs issued had ever been recovered. In 2017–18 NHSBSA spent £11.2 million managing the PCN process, equivalent to 31 pence per £1 recovered.60 It used this figure to justify its approach, but it has not included the costs incurred by the wider health system or to patients, including: • Patients ending up in hospital as a result of failing to seek the treatment they need, because they are worried about getting a PCN;61 and • Patients receiving and paying PCNs when they could have successfully challenged them based on an existing exemption.62
27The Department told us that under the previous policy, very few checks were carried out,...
Concluded (the committee's words)
The Department told us that under the previous policy, very few checks were carried out, and justified the current PCN process because it is bringing in cash for the NHS as well as deterring fraud.63 NHSBSA told us that NHS England is making a reasonable yield from the PCN process, in addition to the £49 million of estimated fraud that it has deterred.64 But the net yield last year (2017–18) was just £25 million, compared to the annual cost of prescriptions which is around £9 billion.65 60 C&AG’s Report, Key Facts (page 4) 61 Q 198 62 Q 81 63 Q 109 64 Q 197 65 Qq 89, 90, 196; NHS Digital, Prescription Cost Analysis – England, 2018, Mar 2019 18 Penalty charge notices in healthcare
Evidence
Oral evidence sessions 1
- 1 Jul 2019No witnesses recordedparliament.uk ↗